Spot the difference.
Then: Entain, the owner of Ladbrokes and Coral, “acknowledges and regrets that certain legacy systems and processes . . . did not adequately meet the regulatory requirements in respect to social responsibility and anti-money laundering (AML) safeguards”.
Now: Entain “accepts that certain legacy systems and processes . . . were not in line with the evolving regulatory expectations . . . in respect to aspects of social responsibility and anti-money laundering safeguards”.
2019: the group, at the time called GVC, was fined £5.9mn by the Gambling Commission, but said it had already “transformed its AML and safer gambling processes” through its “industry-leading Changing for the Bettor responsible gambling strategy”.
2022: the company agrees a £17mn fine for its failure to enforce AML rules and protect vulnerable customers. And whaddaya know? The behaviour between December 2019 and October 2020 “predates the many changes” the company has made, including its “Advanced Responsibility and Care programme” which uses “revolutionary AI technology”.
Perhaps it’s for the best that the machines are now involved. Because others involved in this story — at Entain, the regulator, or both — seem slightly slow on the uptake.
With the UK government supposedly finalising its long-awaited paper on gambling reform, Entain’s latest fine raises questions about the ability of the industry to change and the efficacy of the current regulatory system.
How much of an incentive really is there for companies to self-police and do proper checks on what the commission’s chair Marcus Boyle recently described as “jaw-dropping examples of substantial amounts being taken from individuals who can’t afford to wager such sums”?
Perhaps he meant the customer who deposited £230,845 over 18 months, repeatedly gambling overnight, with only one chat interaction from the company, and whose account had erroneously been reopened in 2018 after a previous decision to close it?
Or the customer who deposited £742,000 over 14 months without questions being asked about affordability or income? Or the social housing resident who deposited £186,000 over six months, without a check on their source of funds?
Or the lack of any checks on a customer who regularly loaded £500 on to terminals in betting shops, staking £168,000 over eight months and losing a total of £28,000? Or the failure to refer a shop customer who unusually bet £29,372 and lost £11,345 in a single month for a safer gambling review?
Entain’s penalty was a negotiated settlement, rather than an enforced fine or a formal warning; its licence hasn’t been put under review. It said that, despite AML infractions, the commission found no evidence of “criminal spend” in its operations.
The industry — in 2019 and now — complains that increased fines reflect a punitive, unpredictable regulator that doesn’t work constructively with the sector. Equally, Boyle in May said that enforcement to date, with operators paying out more than £130mn over five years, “clearly is not a sufficient deterrent”.
Fines may be a cost of doing business for an industry reliant on small numbers of its customers staking vast sums of money: excluding the National Lottery, the sector makes 90 per cent of its money from 5 per cent of its customers, according to the regulator. Entain’s latest bill is about 3 per cent of last year’s group underlying profit.
Its repeat offences seem to make the case for the more systematic intervention under consideration by the government, like more formal affordability checks, as it seeks to curb the sector’s reach and prevent harm following its explosive growth since liberalisation in 2005. Also needed: a beefed-up regulator, backed by independent research based on real-time data that could be funded through a proposed statutory industry levy.
The regulator’s threats of tougher action, including the “very real possibility” of licence removal, aren’t seen as terribly credible by the industry, by those campaigning against gambling harm, or the market. Entain’s shares fell just 3 per cent on news of the fine.
The industry’s pledges feel similarly weak. The sector promises a “single customer view” of an individual’s behaviour, a challenge outsourced by the regulator to industry body the Betting and Gaming Council. Yet Entain couldn’t even manage this within its own group: one customer who had their account blocked with Coral was immediately able to sign up with Ladbrokes and deposit £30,000 in a single day.
Entain, as part of its settlement, will appoint a board member to oversee its improvement plans. But it is policymakers in Westminster who must do more to prevent harm across the sector.